A Study On Firm's Brand Extension Strategy

Brand is an important tool of modern marketing. Brand equity is one of the most important intangible capitals of an enterprise and its significance is becoming more and more obvious with the development of the market-driven economy in China. Powerful brand is increasingly becoming the pursuit of the enterprises. The brand extension strategy is a useful method to extend the brand equity. The excising brand image has close relationship with brand extension. Some China drugs manufacture has built powerful brand, and they are confronted with the primary problem of how to extend the brand equity.In 1960's, modern brand concept was emerged and someone began to be interested in brand management field. Till the end of 1970's, Tauber put forward the theory of Brand Extension. And the subject of brand extension has been becoming the focus gradually after Aaker & Keller, two famous marketing experts, published an article that was Consumer Evaluation and Brand Extension. Nowadays, many brand managers of our country are also willing to develop product scope through brand extension in order to improve their market share. Though a few companies achieved success, it is the most difficult to more companies taking the crushing defeat as the failure of brand extension. Evidently, how to handle brand extension appropriately is a realistic problem.On the basis of summing up predecessor's research about brand extension, this thesis focuses on how to avoid the trap of brand extension and elaborate the advantages of brand extension. Through trapping the value of brand, this thesis finds out that brand identity is the most important factor to decide brand extension.